Jessica Livingston on How To Build The Future

Our second guest on How To Build The Future is Jessica Livingston, Co-Founder of Y Combinator!

Jessica has been instrumental in the creation and continued success of YC. She talks here about what founders of very successful companies do in their early days, and also what she did in the early days to make YC into what it’s become.

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Transcript

Craig Cannon [00:00] – Hey, this is Craig Cannon, and you’re listening to Y Combinator’s podcast. Today’s episode is with Jessica Livingston and Sam Altman. Sam’s the President of YC Group, and he interviewed Jessica for a series called How to Build a Future, which you can check out on our YouTube channel. Jessica is co-founder of YC, and she is also the author of Founders at Work, which is a collection of interviews with founders of famous tech companies. Okay, here we go.

Sam Altman [00:22] – Y Combinator has funded 1500 startups, and they’re worth more than $70 billion in total. More than 10 of them are worth a billion dollars or more. So in terms of how to create a unicorn, Jessica Livingston probably knows more about this than maybe anybody else in the world. So we are super delighted you came here today to talk to us.

Jessica Livingston [00:40] – Thank you for having me.

Sam Altman [00:42] – What I really want to get out of you is how founders get on a path to build a huge company? So you have now, for 11 years, seen founders come in, when they’re just two or three people and an idea. And sometimes, those founders go on to do nothing, most of the time. Sometimes they create a small success. And sometimes they create these companies that really transform the world. And YC has been very fortunate to be involved in a lot of those. Airbnb, Dropbox, Stripe, the list goes on. And what I think would be really helpful is to talk about what the companies do during Y Combinator, that allows them to then go on and build these super impactful companies. So what have you observed the very best companies do, when they’re brand new?

Jessica Livingston [01:26] – Well, I’ve now seen more than 1000 companies go through YC so I’m very familiar what these companies do during YC and I’m first gonna say that there’s not really one path for everyone, necessarily, and a lot of times, these successful startups get started almost accidentally. But when they’re at the point where they say, yes, I am gonna take this company seriously, I’m gonna apply to Y Combinator and then they come here to Silicon Valley for three months, the most successful founders, I’ve noticed, are totally focused on two things: building their product and making something people want, which of course is our motto, and talking to their users. And they do not let themselves get distracted by anything else and that seems so obvious, but what’s not obvious is how easily distracted founders can be by lots of other things going on and the most successful startups are like hyper-focused on their product.

Sam Altman [02:29] – What are some of the things that distract founders that seem like good ideas at the time?

Jessica Livingston [02:33] – Oh, there’s a lot of these. And in fact, in a talk that I gave at the Female Founders conference a couple months ago, I referred to some of these things as the startup equivalent of wolves in sheep’s clothing ’cause they really do seem like you’re doing business. A few of them are talking to big companies to try to form partnerships in an attempt to get better distribution or somehow get more users. To do a lot of PR before you’ve nailed down the product, to talk to corp dev (corporate development) people when you’re not thinking of being acquired, yet you’ll still have meetings with these people or you’ll take meetings with investors when you’re not in fundraising mode, just to sort of build a relationship or going to conferences, networking events, all these things that seem like important things to do as part of your business are not important in the very early stages when it’s critical to build your product.

Sam Altman [03:40] – And how do you know when you have hit the product as you just said?

Jessica Livingston [03:43] – Well I think when you have people using it. You can measure your growth and you can measure how many users you get and are they coming back, are they paying for your product, I mean, that’s just the greatest thing of all, if you can charge for your product and that growth rate is going up.

Sam Altman [04:01] – So for all the YC companies that have gone on to be these household names, did they all do this during YC, where they just focused on their growth rate, writing code, talking to users, are they the companies that ended up ignoring everything else?

Jessica Livingston [04:12] – Yeah, pretty much. If I had to think back on the most successful startups, all during YC they were super focused and they weren’t all over the place in terms of ideas that they were working on or things that they were doing. They were definitely focused.

Sam Altman [04:29] – Did they have big plans even during YC? Could Brian Chesky of Airbnb have told you during YC, here’s how we’re gonna be a $25 billion company and here’s what we’re gonna look like seven years later?

Jessica Livingston [04:40] – I don’t think they would have gone that far. I think that all of the most successful founders have ambitious plans and they certainly start a lot smaller, they seem much less important when they’re first getting started but I think the founders do have a grand plan. I have to believe, though, that when they’re all in the earliest phases, none of them can predict just how big they’ll be, I don’t think Brian Chesky knew that they’d be where they are today.

Sam Altman [05:11] – And how much strategizing do you think the companies do about how they’re going to get from here to the next step to the step after that, during YC, are they really just focused on trying to make a few users really happy, or are they thinking about, well, we need to build up a monopoly and so in Airbnb’s case, we’ll have that because we’ll have one marketplace, or is it really just like let’s build this product people love and see where it goes?

Jessica Livingston [05:34] – I really do think it starts as let’s build this product and see where it goes, in some cases, let’s solve our own problem and see where it goes, I’m specifically thinking of Stripe, I mean, they built that product ’cause it was a pain in the ass for themselves. They were solving something for themselves. So I do think that they are saying let’s build this and see where it goes. However, I think that the most successful ones do have that grander vision. I remember specifically during YC, Airbnb said to themselves and I think to investors, we plan to become the eBay of space. They were nowhere near the eBay of space at that point but they had that vision and they were working toward that.

Sam Altman [06:21] – How much does the idea matter? You’ve said Airbnb came with this idea that turned out to actually be the eBay of space but a lot of founders I think don’t get started because they don’t yet feel like they have the idea that can be the hundred billion dollar company. So how important do you think it is to get the idea just right at the beginning or to just get started with something and then figure out where to take it?

Jessica Livingston [06:43] – I’m of the mind of just get started with something. And that’s because we are funding companies at such an early stage that we’re really funding the companies for the founders and for the attributes of the founders, do they seem determined, have they been able to ship something in the past, do they seem open-minded about things, are they domain experts? A lot of times, they don’t get the idea right the very first time. They might be in the general vicinity of being right, but then they have to adjust their idea. Some founders totally fail with their idea and have to change completely but I think it’s more important to get started with something, build it, ’cause your idea’s always gonna evolve, I mean, Airbnb is to me one of the most famous examples of an idea that has evolved. They came to us with their idea which was, at the time, renting out airbeds in your home while you were there during conferences, that’s pretty focused, right? And then they said, okay, now we’re gonna rent out airbeds in your home, but not during conferences. Then it was renting out your own home, so it morphed.

Sam Altman [08:02] – And did all of that morphing happen during the YC program?

Jessica Livingston [08:04] – No, it did not happen specifically.

Sam Altman [08:06] – How long did it take?

Jessica Livingston [08:07] – I think it, I wanna say it took about a year. I’m not 100% certain but I remember what happened specifically was Airbnb was always very strict about the host being home so that they could provide breakfast because it was air bed and breakfast dot com.

Sam Altman [08:25] – Makes sense.

Jessica Livingston [08:25] – And then the famous story is that Airbnb, one of their hosts was Barry Manilow’s drummer and he had this great place in New York City and he contacted them and said, hey, Barry’s going on tour, I’m gonna be gone, can I just rent out my apartment while I’m not there, and the Airbnbs were like, ugh, that doesn’t really fit with what we do.

Sam Altman [08:48] – That’s how they figured out?

Jessica Livingston [08:49] – That’s how they figured out how to rent out whole spaces and to this day, I think that that’s the majority of their business, but it took something like that to get them to even consider doing it.

Sam Altman [09:02] – Could you tell the story of what you thought the first time you met the Airbnb founders, when they came in to interview for YC? I mean, I know they were in kind of a rough place, they were totally out of money, every investor had said no to them.

Jessica Livingston [09:12] – Yes, we actually did not know what a rough place they were in, I know that now from hearing stories.

Sam Altman [09:19] – And this was 2009, right?

Jessica Livingston [09:21] – This was actually in the fall of 2008, we did the interviews in November and for people that weren’t around in the fall of 2008, it was really a grim time to be doing a startup in Silicon Valley.

Sam Altman [09:34] – Because the macroeconomic conditions had collapsed.

Jessica Livingston [09:36] – The macroeconomic conditions had collapsed, no one knew what was gonna happen, angels were closing their checkbooks, oh, we’re gonna hold off on investing, it was really sort of a scary time. And so I do remember we went into interviews saying, we’re only gonna choose companies that we think could make it to profitability really quickly on their own and then they can live as a cockroach.

Sam Altman [10:01] – Because you just weren’t sure they’d be able to raise any money at all.

Jessica Livingston [10:03] – Right, we weren’t sure that come March at demo day, we had no idea what investors would be doing and so we were really sort of frightened. It would be a disaster if we had this big demo day and none of the startups could get more funding, that would be bad, so we were very strict. So the Airbnbs came in and they were sort of a last minute addition to the interview process, I remember Michael Seibel, one of the partners here, said hey, can you slot these guys in, they’re really good, at least have them come in, so we said fine and I remember during the interview, Paul tried to change their idea. We thought this idea of renting out airbeds was a little weird.

Jessica Livingston [10:53] – I know, I know, but he did try to pitch them a new idea, and they were like, no no, and that’s just one of those things, they knew they were onto something because they themselves were hosts and that is one of the key things about founders is that when you’re using your own product or solving your own problem, you have all these insights that no one else has and the Airbnbs were renting out their room in their apartment because they couldn’t pay their own rent. So they had a lot of insights into this idea.

Sam Altman [11:29] – It’s sort of funny given the current controversy on Airbnb that Airbnb started as an affordable housing company.

Jessica Livingston [11:36] – You know, it’s outrageous.

Sam Altman [11:38] – So they were using their own product, they had these insights that it was this wonderful experience when someone comes out of town to have hosts that can help them and show them around and they knew they were onto something. So they convinced us that their idea had legs and that the few users they had loved them. I remember more about the founders, though. I really liked the founders, they were convincing when they spoke, you could tell they had thought about this problem a lot, they didn’t have all the answers by any means, but they just seemed like they had thought about this a lot and I remember also they brought in as a gift these cereal boxes, Obama-os and Cap’n McCains or something. This was the 2008 presidential election.

Jessica Livingston [12:30] – This was the 2008 presidential election and they had made these cereal boxes with Cheerios and Cap’n Crunch in them, which sounds so silly ’cause they’re just cereal but I remember they said, oh yeah, we designed these and then we went out and got Cheerios and we stuffed ’em in there and glue-gunned the boxes together and we’ve been giving them away and I thought, oh my god, these guys are glue-gunning the cereal boxes.

Sam Altman [12:55] – And why were they doing this?

Jessica Livingston [13:00] – They really were doing this because they were out of money and this was like a Hail Mary for them and they did wind up making a lot of money from these but to us, they were doing it as sort of a fun thing because they’re Airbnb, they provide breakfast, coincided with the presidential elections.

Sam Altman [13:18] – But the original driving reason was just like, they couldn’t raise any money.

Jessica Livingston [13:22] – They couldn’t raise any money.

Sam Altman [13:23] – They were just doing anything they could to survive.

Jessica Livingston [13:25] – My god, again, during the interview, we did not know these stories but when you hear the stories of the problems that they had trying to fundraise prior to YC, it’s crazy. They had one investor leave in the middle of a pitch, just walk out without even saying goodbye, no one believed this idea was good or certainly would be big.

Sam Altman [13:48] – Did you know at the time that the idea could be great or was it for you really just a bet on those three guys as founders? I have to admit it was more of a bet on the three founders. They seemed really good. I did sort of like the idea of being able to stay in people’s homes but I have to admit, I was not thinking it was gonna be huge.

Jessica Livingston [13:55] – I have to admit it was more of a bet on the three founders. They seemed really good. I did sort of like the idea of being able to stay in people’s homes but I have to admit, I was not thinking it was gonna be huge.

Sam Altman [14:11] – Just ’cause that story was so interesting, what was it like when you met the Collison brothers, I think they were 19 and 17 when they started Stripe and they came in and said, we’re gonna do this crazy thing and we’re teenagers and we’re going to take on the financial system of the world. How does that conversation go?

Jessica Livingston [14:26] – Well, I have to admit, we met Patrick years earlier when he was 16 or 17, still living in Ireland because he looked up Paul and we had him over for dinner. So it wasn’t like we first met them at a YC interview. We, I think Patrick was working on some other idea first or something and we had high regard for him, he certainly was good at building things and he had a Wikipedia app so we knew he was a talented programmer. He introduced us to his 16-year-old brother.

Sam Altman [15:03] – 16, there we go.

Jessica Livingston [15:03] – He was 16 when we met him, John was, and I’m trying to remember when they said, “Oh, we’re gonna take on the financial industry,” I think we were kind of like, “Do you realize how hard this is? And you don’t have connections.” But they were intrepid, they were like, well we don’t have connections, we’ll find connections and they just, that is actually a really good question that you bring up because it shows how determined they were and how focused they were, and you think the head of a bank is gonna take a 19-year-old startup founder seriously? It seems pretty implausible, right? But they were good enough that they were able to convince these banks to work with them.

Sam Altman [15:49] – Are there other traits in the founders that go on to really change the future besides determination, that separate the very best founders from the mediocre founders? Have you noticed any other traits that founders should aspire to that really wanna have a big impact?

Jessica Livingston [16:10] – Yes, if I had to say the most important traits of the most successful founders, I’ve already mentioned determination, that is by far the most important quality.

Sam Altman [16:22] – More than intelligence?

Jessica Livingston [16:22] – More than intelligence, more than previous success in school, I mean, remember when we started Y Combinator our hypothesis was we’ll just fund all the best hackers from MIT and Harvard and they’ll turn out to be great startup founders. That is not true, that is absolutely not true. A lot of them are good and in fact Patrick was from MIT, but it’s not true for the most part. Determination is the most important thing. Again, understanding your users and building a product with a great user experience is second most important. Not being distracted, not getting lured down these paths that aren’t gonna be important for building your product. Being flexible-minded I’ve always felt is very important because you have this idea and you test it out and it doesn’t always work the first time and so you have to be able to say, okay I thought I was gonna do this but let’s try this, even though I have a lot of energy vested in this, let’s try this direction. You really have to be open-minded and then ultimately, you have to be a good leader, you have to be convincing and a good leader because you are gonna be convincing employees to join you, you’re gonna be convincing investors to invest in you, when you do get to the point where you’re doing deals with bigger companies, you have to convince them, your whole world is convincing people and so you have to be able to communicate your idea and convince people why they should care about you more than any of the other hundreds of startups out there.

Sam Altman [18:08] – So now I’d like to talk about your startup, Y Combinator, and how you started that. Could you tell us the story of starting Y Combinator?

Jessica Livingston [18:15] – Yeah, it was very much started in the same way that a startup is started, where Paul and I had this idea, we really felt that the investment world was broken. If you were an early-stage startup and you just wanted to test something out, you either had to go to a VC and get $5 million, which is virtually impossible at that early stage, or you had to know someone who was rich and could give you money. And we thought there could be something better, we thought there could be a standardized branded form of funding. So if you wanted $25,000 or whatever, you could come to Y Combinator and we’d make it very easy for you. So we thought, okay, let’s start an investment company and it was just gonna be Paul and me and then we sort of lured in his old co-founders, Robert Morris and Trevor Blackwell, to be part of this even though they were full-time on something else and we said, gosh, none of us know anything about angel investing, well let’s learn. So how should we do that? Let’s fund a whole bunch of companies at once and we’ll learn a lot, so we set up a website and we said, come join the summer founders program, it was back in Cambridge, Massachusetts, and it was for the summer of 2005 and we started working on it, let’s just say in January, and we posted an application, we wanted to change a few specific things. We wanted to make it very easy for people to find us and apply, they didn’t have to have a connection to us. We had an application of like 20 questions, we wanted to make it very simple on our side, we’re giving you $12,000 per startup, or 18,000 if you had three founders, but it was a very specific amount for this amount of stock and our paperwork is gonna be real straightforward, you can see it in advance and we’re gonna make the decision that day. We’ll interview you and tell you that night and that never happened back before us. No one got a same-day decision, for the most part. So 200 people applied, they had known about Paul ’cause of his essays, you were one of them.

Sam Altman [20:35] – I was.

Jessica Livingston [20:35] – Came out from Stanford, I remember that interview very well. And we found eight companies to fund that summer and we learned very very quickly into the three months that funding startups in a batch was incredibly powerful and it was powerful in that you could teach them all sort of the same things at once and they became colleagues because starting a startup as one or two people is very lonely and very isolating and back then in 2005, there was no information online about early stage startups at all. So no one knew what they were doing so it was sort of a nice atmosphere.

Sam Altman [21:18] – So even Y Combinator was an example of this, start with an idea you don’t know much about, build something people want and iterate.

Jessica Livingston [21:24] – Yes, yes yes yes, and we started small.

Sam Altman [21:28] – And do it light and start small.

Jessica Livingston [21:29] – Do it lightweight, start small, and evolve. And we realized, we had dinners on Tuesday nights, which actually we still have to this day and we have guest speakers come in, we had paperwork that we gave them, I personally helped everyone incorporate their company.

Sam Altman [21:44] – What else did you spend your time on that first summer?

Jessica Livingston [21:47] – Oh my god, what didn’t I spend my time on? As any startup, there was too much for everyone to do. Paul spent his time advising the startups on their ideas ’cause I didn’t really know that much about startups. I was doing everything to get Y Combinator up and running, we had to get our office, we had to cook dinners, I was going grocery shopping and Paul was cooking the dinners, we were recruiting speakers to speak that summer.

Sam Altman [22:14] – This is not what most people picture doing when they think about starting a really important company. I think it’s good to note, this is in fact…

Jessica Livingston [22:20] – Oh my god, there’s so much unglamorous work that founders have to do early on and you just have to do it but I mean, I was delivering air conditioners to different people. We had eight startups in that batch and they were all living scattered around the Harvard Square area and there was a heat wave and we were like, we can’t have our founders not being able to work, so I went to Home Depot and I bought like 10 air conditioners and delivered them to everyone.

Sam Altman [22:49] – When did you know that summer that Y Combinator was going to work?

Jessica Livingston [22:53] – We had a feeling pretty early on.

Sam Altman [22:56] – First couple of weeks?

Jessica Livingston [22:58] – I would say, within the first month, we were like, this is really interesting and people are working on very interesting ideas. I mean, you were working on location stuff on your phones.

Sam Altman [23:08] – Reddit was in there.

Jessica Livingston [23:08] – Reddit was in there. We were very interested in Reddit. The Justin.tv and Twitch guys, Justin and Emmett, were working on a calendar, unfortunately Google Calendar launched and killed them, but I mean, these were interesting things, so we were very excited about the ideas.

Sam Altman [23:29] – It’s a great story about investing in people, that it was Justin’s third Y Combinator startup, I think, that ended up being a billion-dollar exit.

Jessica Livingston [23:36] – Yeah, yeah yeah yeah.

Sam Altman [23:37] – And YC funded him three times, and it worked out on the third.

Jessica Livingston [23:40] – And it worked out, the third time’s the charm, yes. I mean, this is again going back to you’re funding the people, Justin and Emmett were a great team. This is a bit of a tangent but it’s important to remember they were college roommates and best friends growing up and so they had known each other for a long time and have this great trust, and so when they wanted to build something, they were both excellent programmers, and that’s as good of a bet as you can make on a 22-year-old.

Sam Altman [24:10] – How important is it to have co-founders at all and then how important is it that the co-founders have a pre-existing relationship like that?

Jessica Livingston [24:17] – I think it’s critical, I think there have been cases of successful startups with one founder, but I’m sure they will tell you it’s extremely hard and overwhelming, emotionally draining, you have no peer who you can rely on for moral support and holding all of that, it’s a big burden for people emotionally, I think. Also, at the very early stages, there’s so much to get done that you need more than one person doing it, you can’t be out fundraising and building the product at the same time. So yes, it’s important to have a co-founder, it’s not impossible. I will say it’s critical that you know your co-founder well because if you don’t, if you meet at a hackathon.

Sam Altman [25:05] – Do you ever see that work out?

Jessica Livingston [25:08] – Rarely. I’m trying to think of an example and off the top of my head I can’t think of an example of two people who were introduced or bolted onto each other at the last minute ever working. I’m sure there are examples of it having worked, but I can’t think of them. The relationship becomes so stressed as the startup goes on its path, I mean, you have, you could get sued and you have to deal with this or you get an acquisition offer that’s really tempting and that can cause friction and so many things can cause friction and tension, it’s really like a marriage, and I know we all laugh at how we compare founder relationships to a marriage, but in many ways, it’s kinda like that.

Sam Altman [25:53] – There’s a lot of truth to that.

Jessica Livingston [25:54] – Yeah, yeah.

Sam Altman [25:55] – So you said within the first month, you could tell YC was onto the something, but when did you first realize that YC was going to be as big as it has turned out to be? Did you have any idea of that, that summer?

Jessica Livingston [26:08] – I don’t think we had any idea of that, that summer. We knew we were onto something and after that summer, we knew we had to come out to Silicon Valley, that was an important next decision for us. We knew that people could easily copy us and we didn’t want someone else to be the Y Combinator of Silicon Valley. We wanted to be the Y Combinator of Silicon Valley and I remember Paul saying, “We gotta go out there,” and I remember thinking, we have two months to do this.

Sam Altman [26:36] – Was that really driven by not wanting to be copied?

Jessica Livingston [26:39] – Yeah.

Sam Altman [26:39] – Wow.

Jessica Livingston [26:41] – We did not want someone else to be the Y Combinator of Silicon Valley.

Sam Altman [26:43] – You notice that with great startups a lot, that they really hate getting copied, I think that’s an interesting point.

Jessica Livingston [26:51] – Well, you know, I think no one likes getting copied, it’s unpleasant, I’m used to it by now and you just can’t worry about it, if you are building something great, you’re gonna get copied. So anyway, so we came out here, and that was also very important for us ’cause we didn’t have relationships in Silicon Valley, we didn’t know the investors out here and that’s when we started to meet the investors and that’s an incredibly important component of Y Combinator, that we have great relationships with investors and they come to our demo days and they invest in our startups, ’cause again, we are like first gear for startups, we’re helping them get started and then we want to introduce them to wonderful later-stage investors.

Sam Altman [27:40] – So once you got to Silicon Valley and started running the program out here, then did you know it was gonna be really big?

Jessica Livingston [27:47] – Not yet, not yet. I think when we had a feeling that it was gonna be really good was when, Reddit got bought and that was very exciting news for us but I think when Dropbox started getting some traction, then we thought, whoa, this could be a contender, this is someone doing really really well and you were funded, and so our companies were sort of flourishing and that’s when we knew, I think this could be good.

Sam Altman [28:21] – And what is it like looking back now and Y Combinator has become this pretty influential thing that has impacted a lot of people and a lot of industries. Looking back, is there anything, you’re like, well, if I knew YC was going to be as important as it’s become, I would have done this differently, or any lessons that you take away, or is it just like, well this happened and I was only ever looking one step ahead at a time?

Jessica Livingston [28:42] – You know, there’s always things that you’d do a little bit differently. Possibly, we would have hired more partners earlier on so that we could have accomplished more. I mean, for many years it was just Paul and me full-time and so there was only so much we could do. So we didn’t do much outreach and I wish maybe we could have done more of that earlier on, but in the grand scheme of things, there’s no massive, massive mistake, I think we sort of grew organically.

Sam Altman [29:19] – And what is it that you did as you were growing organically that has made YC work so well? Someone recently told me that there are now 2500 accelerators around the world.

Jessica Livingston [29:26] – Oh god.

Sam Altman [29:29] – However, every billion-plus dollar company so far, ever to come out of an accelerator, I think there’s 11, have been part of YC. So that’s a great credit to you and Paul, but what did you do in the early days that set up YC to do this?

Jessica Livingston [29:45] – Well there are a couple things and sometimes I would be nervous about sharing some of our secret weapons, but I’m gonna share one because it would be great if people copied this, but they won’t. One of the most important things is that Y Combinator always started to be founder friendly. We were not doing this to make money. We were doing this to see if we could encourage more startups to get started because we felt that would be good for the world, more people starting startups, more innovation, that’s good for the world. And so we didn’t do it thinking we could make money and we weren’t trying to squeeze out the best deals in every situation. We were always driven by what’s best for the founders, what’s best for the startups, our terms and our investment paperwork are very founder-friendly and I think that’s attracted good founders who wanna be treated fairly and not be taken advantage of.

Sam Altman [30:48] – It’s interesting, you see that among many of YC’s most successful founders, they wanna make a lot of money, but that is far from the primary motivation.

Jessica Livingston [30:55] – Yes, yes. You cannot be the most successful startup founder if you are driven by money, you have to be driven by a greater purpose.

Sam Altman [31:04] – So YC’s version of this was just like, it’d be good for the world to treat founders better and have a lot more startups.

Jessica Livingston [31:09] – Yes, yes. Now, we hoped we made some money, ’cause we couldn’t keep self-funding for the rest of our lives, we couldn’t be self-sustaining if we didn’t make some money and by the way, for many years, we didn’t make money.

Sam Altman [31:21] – I remember that, people forget that now.

Jessica Livingston [31:23] – People forget how long it takes to make money as an investor. So we were always driven by this benevolence and I think it’s still part of our DNA. I truly believe that. I think we gave great advice.

Sam Altman [31:41] – Surprisingly hard to get from investors.

Jessica Livingston [31:43] – Yes, yes. There are some great investors out there that do give great advice, but for the most part, getting really good advice is hard. I think Paul Graham’s exceptional at giving startup advice and helping people with their ideas and quite honestly, telling people, “Hey you’re doing this wrong, don’t do it that way,” in a way that’s very straightforward and founders can respond to that pretty quickly. What else, what are the important things about us? We’ve always attracted, from the very first batch that you were in, I believe we attracted talented founders and they’ve gone on to be role models and attract other people that are talented, like kind, intelligent founders and so I think it’s just sort of grown organically and spread and we’ve kept a pretty great community of founders over the years.

Sam Altman [32:47] – So there are a lot of people that have realized startups are really great ways to impact the world and get new technology built and distributed. At a young age now, people are realizing they may wanna start a startup someday. So if you’re an ambitious teenager or college student, what should you spend your time on if you know someday you wanna start a startup?

Jessica Livingston [33:09] – Well, there’s a lot of things you can do to sort of prepare yourself to be a startup founder. The first is, learn to code. There’s a lot of great online courses now if you don’t already know how to code but I would strongly recommend that everyone learn to code, even if you’re not great, you at least know how to do it and it helps you judge other programmers. Build stuff with people. It doesn’t have to be the next Facebook, which by the way did start out obviously as a little side project when it got started, but just build something that you might like to use. Try to solve your own problem, work with other people, especially if you’re in college, that is just the best place to meet potential co-founders. And get to know people and talk about interesting problems and try to solve them. It does not have to be the next startup, but it will at least get you thinking about problems, it will get you practicing launching something and listening to users and talking to users and after that, if you’re not ready to start a startup right away, go work at an early-stage startup. You can learn so much working at an early-stage startup that you wouldn’t working at a big company. So that’s probably my best advice of what to do to prep to become a startup founder.

Sam Altman [34:34] – Great, okay, last question.

Jessica Livingston [34:34] – Yeah.

Sam Altman [34:36] – You are probably the most successful female founder in Silicon Valley at this point, so do you have advice for other female founders or aspiring female founders about what to do?

Jessica Livingston [34:47] – Well it’s definitely a subject I think about a lot, because when we first started Y Combinator, there were very few female founders. They were scarce and I’m pleased that there are more these days and there just continue to be more and so I’ve spent a lot of time trying to help the women that we’ve funded to become more successful so that they can go on to inspire people, ’cause you have to have those role models so that you can think, gosh, maybe I could start a startup. But I will give some advice based on my own experience. You can’t worry too much about what everyone’s saying and all the noise, and oh, it’s so much harder as a woman. Yes, it’s harder as a woman, I’ve been discriminated against. But I have always kept focused on my product and what I’m doing and I don’t listen to all this stuff going on and I’m building a product that people love. And I think that the women we funded would say the same thing. They’re startup founders, they’re not necessarily female startup founders, they’re first and foremost startup founders and they are caring about their product and their users and they are totally focused on that. And so my advice is just do it, start a company, apply to Y Combinator and build something people want.

Sam Altman [36:16] – Great, well thank you so much for joining us and funding my company and hiring me. It was great, thanks a lot.

Jessica Livingston [36:21] – Thanks, Sam.

Craig Cannon [36:23] – Alright, thanks for listening. Please remember to subscribe to the show and leave a review on iTunes. After doing that, you can skip this section forever. And if you’d like to learn more about YC or read the show notes, you can check out blog.ycombinator.com. See you next week.